Black Cooperatives

September 21, 1968

A major preoccupation of American social scientists is demonstrating that radicals have no following. According to samplings made for Xerox's "Black America" television specials, for instance, only six percent of black people "approve" of Stokely Carmichael. For all the agitation over community control of schools in New York, the Center for Urban Education reports that only one-third of Bedford-Stuyvesant residents favor community control. These results are hardly a revelation. The enduring paradox of radicalism is the reconciliation of faith in the people with the knowledge of their conservatism.

Few Americans are more conservative than poor black people in the South, who have lived since their legal emancipation in the economic and spiritual bondage of a feudal agricultural system. If they are tenants, blacks must mortgage their crops to landlords before the planting season in order to get seed and fertilizer for farming, and cash and rent for subsistence. If they strike out on their own, they get no assistance from banks or the appointed federal agency-the Farmers Home Administration because they have no collateral and no independent production history. Furnishing merchants are glad to help out at the going interest rates of six to eight percent. At the end of the harvest, if they are unlucky, black farmers, whether tenants or owners, have nothing to show but more debt. If they are lucky, they have nothing at all.

In recent years, even this fugitive security has been eroded by the effects of the industrial revolution in Southern agriculture. Subsidized by the Department of Agriculture, plantation owners and prosperous white farmers have been able to mechanize their operations and diversify their crops (King Cotton has abdicated). As a consequence of the expanded production of their masters, black people are left with fewer jobs on mechanized, white-owned farms and with reduced allotments under the federal agricultural system for relatively unprofitable crops such as cotton andcorn. Lacking the resources to mechanize and diversify, unaided by the federal government, and finding no employment opportunity in the rural South, younger blacks migrate to Southern cities or to Northern ghettos at the rate of 100,000 a year, while older people remain in the thralldom of unemployment or subsistence farming. The departure of a restive native population suits the well-heeled Southerner just fine. A Southern governor recently informed a luncheon companion that his state was going to have the highest per capita income in the country. Pressed by his incredulous listener, he was happy to elaborate; "Why, we're gonna move all the poor people out."

Now on this barren ground of Southern agriculture there has grown up a baby movement of black cooperatives. One of the first was Southern Consumers in Lafayette, La,, which was founded in 1961 by a black priest. Father Albert McKnight, and now has 12,000members throughout southern Louisiana, Most of the cooperatives, however, have arisen since that time out of the Civil Rights and Black Power movements. And have taken form as a discernible movement only in the last two years with some strategic financial assistance from OEO and the Ford Foundation, Today there are some 40 of these cooperatives, democratically controlled by a membership of 12,000families, most of whom live in Georgia, Alabama, Mississippi, or Louisiana. Cooperative organizers have found the families deeply skeptical andfatalistic about the prospects ofcontrolling their own destiny through cooperative organizations. But as good conservatives, poor blacks know what they like some money, enough to eat. By generating financial and technical assistance, the cooperative technique is offering black people the prospect of expanding their production, diversifying their crops, and marketing their produce. At the same time, they are acquiring a taste for freedom. What co-op members now perceive as a means of self-determination will in the course of time also be perceived as an end. If they had been polled before they joined the co-ops, these people would no doubt have preferred a well-paying job with Mr. Charlie to membership. The public opinion sample would have arrestei.1 a political development, thus eliminating educational processes from democracy in the name of democracy. Without the political education that grows out of a political process, there is no possibility for social change. There is no radical politics.

The most celebrated of the black cooperatives is the Southwest Alabama Farmers Cooperative Association (SWAFCA) which was organized in the Alabama Black Belt last year by veterans ofthe Selma march. Consisting of members whose average family income was less than $1,500 a year in anarea in which 20 percent of the residents had migrated in the previous five years, SWAFCA was designed to underwrite the production of vegetables, which have been resistant to mechanization and should continue to be largely labor intensive for at least the next decade. The co-op marketed some of the members' cotton. That operation disrupted the system of exploitation of the black farmers, which depends on the identification of each farmer’s cotton at the warehouse so that it can immediately be appropriated by his creditors. Last year, Sam Williams' bale didn't arrive, but a SWAFCA bale did.

The economic and political powers of white Alabama reacted with a vengeance to SWAFCA's smallscale activities. Mixing refused to sell fertilizer andlime trucks used to deliver to co-op members, while processing plants discontinued purchases of pickling cucumbers and Southern peas from co-opmembers. Truckers hired by SWAFCA were stopped for "traffic violations," and the organization was attacked by localnewspapers and politicians,

SWAFCA nonetheless survived and was able to sell $50,000 worth of vegetables for its members and toset up a $35,000 loan guarantee fund which unlocked $100,000 of credit for its members from lending institutions. King Pharr and Whitfield Pickle, the major processors m the area, were forced to raise their purchase prices for cucumbers and peas by 50 percent because of SWAFCA's competition and a thousand new people joined the 800 members in the co-op. SWAFCA’s enemies also failed to prevent a $300,000 grant from OEO. Whitfield Pickle flew up, in the company jet, politicians and probate judges — literally, the courthouse gang— from the ten counties served by SWAFCA, who then descended upon the OEO offices accompanied by the entire Alabama congressional delegation. Gov. Lurleen Wallace vetoed the grant on grounds of its “communist” and “black power” considerations. IN this case, however, OEO resisted the pressure and its director overrode the veto.

At the end of the harvest season this year, SWAFCA will probably have sold several hundred thousand dollars worth of produce despite some deficiencies in grading which cost them dearly in the sale of an earlier cucumber crop. The organization has an estimated potential to market a $3 million crop for its members and thus double their income. Technical consultants are studying the feasibility of SWAFCA constructing with Federal subsidy its own $750,000 vegetable freezing plant, in order to market “Southern vegetables” (greens, Southern peas, sweet potatoes, etc.) nationally. This capability would be helpful since the local A&P refuses to buy SWAFCA produce.

The dynamics of the co-op’s economic growth has created political power. This power has in turn channeled a flow of Federal agriculture money into the organization, thus improving its economic potential. In January of this year, SWAFCA applied to the Farmers Home Administration for economic assistance. The FHA proposed a $400,000 loan which the co-ops board of directors judged insufficient to finance the envisioned receiving and distribution stations and expanded revolving fund. In May FHA approved an $852,000 loan but attached 32 conditions, under which the agency would supervise all expenditures, approve any new financing from public or private sources, and sit in on all board meetings. SWAFCA refused to sign away its independence.

On the same day that the Department of Agriculture had its doors locked against possible invasion by the troops of the Poor People’s Campaign, representatives of SWAFCA and its Washington allies negotiated with Agriculture officials in Orville Freeman’s office. Assistant Secretary of Agriculture John Baker, an associate of Rexford Tugwell in the New Deal Days, consistently blocked the SWAFCA negotiators, and the meeting adjourned. Later in the day, Baker had a change of heart and the negotiations resumed for 18 straight hours until 4 am the next day. After further negotiations, it was finally agreed that FHA would lend to SWAFCA as a “demonstration project’ thus circumventing not only the standard conditions of FHA loans but also state FHA officials in Alabama. Not at all pleased to be overruled, national FHA director Howard Bertsch subsequently offered his resignation as a ceremonial gesture and as a warning against making SWAFKA a precedent for other cooperatives.

Like any good bank, the FHA hates to make high-risk loans. Although three-quarters of the borrows in Alabama’s Black Belt are Negro, they receive less than half of FHA’s loan money. As Alabama FHA Director Robert Bamberg explained to the US Civil Rights Commission at its recent Montgomery hearings, “some people have more resources to borrow more money than others … it goes back to this, in many cases, our nigger population has small acreage.” FHA also does not like to circumvent its state apparatus. As it happens, their man in Alabama, Bamberg, owns a 4,000 acre farm in Perry County and advances credit to his black sharecrop families at a rate above the federal program which he administers. Bamberg told the civil rights commission that the “human kingdom is just like the animal kingdom. The strong take it away from the weak, and the smart take it away from the strong.” In confirmation of Bamberg’s maxim, SWAFCA has been smart enough to extract more than $250,000 in individual loans for its members from FHA.

Some black residents of Taliaferro County, Georgia, have also had some singular success recently in obtaining loans from FHA. In the case of Crawfordville Enterprises, there is the same cross-fertilization of economic development and political organization, growing out of earlier civil rights struggles. IN 1964, black people in the country requested the use of the local gymnasium in the white high school for their 750 students. The school board refused until it was ordered by the courts to integrate as a result of the efforts of SCLC organizers. The county’s white residents responded by bussing their children to neighboring county school or sending them to “private academies.” The Taliaferro school system fired two black school-teachers, Robert Billingsly and Calvin Turner, for their role in the de-segregation struggle. It was these men who set up a silk screening operation in Crawfordville down the road from a state park commemorating Alexander H. Stephens, first vice-president of the Confederacy. The operation failed for lack of capital and know-how in a small predominantly black and economically depressed county whose population is half what it was after the Civil War and whose employment level is half that of 1950.

Working with Randolph Blackwell, a SCLC lieutenant, Billingsly and Turner re-constituted their operation as Crawfordville Enterprises, a community corporation with a democratically elected board of directors (with the stipulation that one-third be employees of the enterprise and one-third be non-residents selected for technical competence). Initially capitalized by private sources and since funded by OEO, Crawfordville has operated on a budget of $350,000, manufacturing pants and shirts for Shirley of Atlanta, and sponsoring a community development program including various social services.

Crawfordville Enterprises has been in serious financial difficulty of late. Its problems — and the interpretation of its —problems illustrate the various possibilities in cooperative economic development. When Crawfordville began running in the red even with the benefit of Federal subsidy it became clear that several management mistakes had been made. The most serious was a contract with a middleman who was buying Crawfordville’s products for less than the standard price. Labor efficiency was not particularly high; cost accounting was poor; there were delays in deliveries.

According to one school of thought concerning low-income cooperatives, evidence of “bad management” is sufficient justification for a more professionalized management and for intervention from Washington of whatever the capital sources. Not only should funds for the employment of professionals be provided and technical assistance rendered, but grants should be conditional upon specific management decisions. A second school rejects the mystique of management and maintains that the leaders of poor folk, adequately funded and technically assisted, are well able to run an economic enterprise if they are given time to learn through the same kind of initial mistakes that professional businessmen regularly make. Since most new enterprises in the mainstream economic world fail, it is hardly surprising in this view that some poor people’s cooperatives should also fail. Those men would like to reconcile community autonomy with external capital sources by funding virtually carte blanche for the long haul. One of the more substantial black cooperatives, the Poor People’s Corp. of Jackson, Miss., has solved the problem in its own way. It has refused Federal money.

For all its problems, it is hardly fair to write Crawfordville Enterprises off as a failure because it has not turned a profit in two years. All of its original workers were unemployed people who had no experience in the garment industry. The plant is producing garments of good quality; its people are earning $60 a week, some four times their average before Crawfordville Enterprises. A number of the community corporation’s 80 employees are people who have actually returned to Crawfordville from Northern cities where they had previously migrated. If it is highly subsidized, so also are the maritime industry, the military/aerospace corporations, the universities.

Black cooperatives are chiefly in need of capital and technical assistance. The formation of the Federation of Southern Cooperatives will go some distance in this direction by providing funds for loan guarantees and technical assistance in accounting, credit management, agricultural economy and marketing. Adequately capitalized, co-ops can succeed on a limited scale. It is too early to estimate whether black cooperatives and community corporations can play a really major role in rural development for the entire black population in the South. There are both economic and political reasons for skepticism. However , there is little evidence to suggest that the alternative—employment in new industries locating in the South—which is favored by liberals and conservatives alike, will ever trickle down to Southern blacks. Union Bag-Camp recently located a camp in Prattville, Alabama, but for black people, it meant only 20 menial jobs. Whatever their economic potential, cooperative black enterprises have this advantage—they reach black people because they are black people. After the assassination of Martin Luther King, Crawfordville workers consulted Randy Blackwell, the organization’s founding father, on whether to take the day off since everyone was crying and no work was getting done. Blackwell told them that they would have to decide themselves since they owned Crawfordville. They went home early that day and set aside Tuesday as well.

This article originally ran in the September 21, 1968 issue of the magazine.